It seems like yesterday the housing bubble popped, our economy went into freefall, and we experienced what was described as one of the worst recession in our history. One of the contributing causes for this was unqualified buyers being qualified and approved for loans they could not afford. Now let's assess this posst by Joe Petrowsky...does it give you cause for concern?

“482--525 Will Get Somebody Qualified for a Mortgage”

The post below talks about 4 lenders that will do mortgages for borrowers with credit scores from 482 to 525. I can’t even imagine what the circumstances would possibly be to lend to borrowers with these kinds of credit scores.

A couple of years ago, I did an FHA loan for a borrower with a credit score of 540. The client was buying a new home for $360,000, putting $160,000 down and his debt ratio was under 20%. It was a real struggle for me to do the loan for the client, it was a loan that made total sense.

During the subprime loan days, I couldn’t imagine doing a mortgage for someone that had credit scores between 482 to 525, but I guess times have changed, for these lenders the boundaries of common sense has disappeared.

Although in today’s tight underwriting market few mortgage firms are willing to originate loans to consumers with dings in their credit history, at least four companies say they will consider applicants with FICOs of under 580, according to new survey figures compiled by National Mortgage News and the Quarterly Data Report.

Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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